Ac Chapter 5

Adequate disclosure is based on

A combination of official rules, tradition and professional judgement

Accounting methods in use, lawsuits pending against the company, and customers that account for 10% or more of the company's revenues are included in

Adequate disclosure

Closing entries would be prepared before the

After-closing trial balance

Of the financial statements, which one is prepared last?

Balance sheet

The closing entry for an expense account would consist of

Debit income summary, credit expenses

Closing entries should be made

Every year

Adequate disclosure demands

Good faith effort by management

Earnings statement

Income statement

Profit and loss statement

Income statement

Statement of operations

Income statement

The order of financial statements is

Income statement, Retained earnings, Balance sheet

Income summary appears on which financial statement

NONE

If the income summary had a credit balance it shows

Net income

If the income summary has a debit a balance it shows

Net loss

Declaring a dividend will ________ change net income

Not

Purpose of closing entries

Prepare revenue and expenses for the next period's revenue and expenses

Dividends should be closed to

Retained earnings

Net Income from the income statement appears on

Retained earnings statement

Publicly traded companies must file audited statements with

SEC

Publicly owned companies are listed on the

Stock exchange

A statement of retained earnings shows

The changes in retained earnings during the accounting period

Assets are considered current assets if

They are converted to cash within a year or less

Dividends declared ____________ retained earnings

reduce